Texas 2023 88th Regular

Texas House Bill HB3239 Introduced / Bill

Filed 03/02/2023

                    88R10513 JXC-F
 By: Hernandez H.B. No. 3239


 A BILL TO BE ENTITLED
 AN ACT
 relating to the participation of distributed energy resources in
 the ERCOT ancillary services and wholesale energy markets.
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 SECTION 1.  Section 31.002, Utilities Code, is amended by
 adding Subdivision (4-c) and amending Subdivisions (10) and (17) to
 read as follows:
 (4-c) "Distributed energy resource" means a resource
 that:
 (A)  is capable of providing energy, providing
 ancillary services, or providing both energy and ancillary
 services;
 (B)  is operated in parallel with and is connected
 to the distribution system at a voltage of less than 60 kilovolts;
 and
 (C)  has an installed capacity of more than 100
 kilowatts and less than 10 megawatts.
 (10)  "Power generation company" means a person,
 including a person who owns or operates a distributed natural gas
 generation facility, that:
 (A)  generates electricity:
 (i)  that is intended to be sold at
 wholesale, including the owner or operator of electric energy
 storage equipment or facilities to which Subchapter E, Chapter 35,
 applies; or
 (ii)  from a facility that is part of an
 aggregated distributed energy resource or that is owned by a person
 who is part of an aggregated distributed energy resource;
 (B)  does not own a transmission or distribution
 facility in this state other than an essential interconnecting
 facility, a facility not dedicated to public use, or a facility
 otherwise excluded from the definition of "electric utility" under
 this section; and
 (C)  does not have a certificated service area,
 although its affiliated electric utility or transmission and
 distribution utility may have a certificated service area.
 (17)  "Retail electric provider" means a person that
 sells electric energy to retail customers in this state. A retail
 electric provider may not own or operate generation assets but may
 aggregate distributed energy resources. The term does not include
 a person not otherwise a retail electric provider who owns or
 operates equipment used solely to provide electricity charging
 service for consumption by an alternatively fueled vehicle, as
 defined by Section 502.004, Transportation Code.
 SECTION 2.  Section 39.351, Utilities Code, is amended by
 amending Subsections (b) and (c) and adding Subsection (d) to read
 as follows:
 (b)  A power generation company shall comply with the
 reliability standards adopted by an independent organization
 certified by the commission to ensure the reliability of the
 regional electrical network for a power region in which the power
 generation company is generating or selling electricity and
 aggregated distributed energy resources.
 (c)  The commission may establish simplified filing
 requirements for distributed natural gas generation facilities and
 aggregated distributed energy resources.
 (d)  Notwithstanding Subsection (a):
 (1)  a facility or owner of a facility that is part of
 an aggregated distributed energy resource, or a retail electric
 provider that is involved in aggregating facilities as part of an
 aggregated distributed energy resource, is not considered to be a
 power generation company solely as a result of those activities;
 and
 (2)  a facility or owner of a facility that is part of
 an aggregated distributed energy resource is not required to
 register as a power generation company if the person who aggregates
 the resources registers as a power generation company.
 SECTION 3.  Subchapter Z, Chapter 39, Utilities Code, is
 amended by adding Section 39.9166 to read as follows:
 Sec. 39.9166.  PARTICIPATION OF DISTRIBUTED ENERGY
 RESOURCES IN MARKET. (a) The commission may delegate authority to
 the independent organization certified under Section 39.151 for the
 ERCOT power region to enforce requirements adopted by the
 commission under this section.
 (b)  The commission by rule shall allow a person who owns or
 operates a distributed energy resource or an aggregation of
 distributed energy resources to participate in the ancillary
 services and wholesale energy markets in the ERCOT power region if:
 (1)  the owner or operator is registered as a power
 generation company if required under Section 39.351 or is exempt
 from registration under Section 39.916(k); and
 (2)  the resource meets all requirements established by
 the commission and the independent organization, including
 electric utility specifications applicable under the
 commission-approved tariff.
 (c)  The commission by rule shall allow a person to aggregate
 resources that are geographically linked to the same electric bus
 or node so that the resources may be considered to be a single
 distributed energy resource for the purposes of operations,
 compliance, and participation in the ancillary services and
 wholesale energy markets in the ERCOT power region. The commission
 by rule shall direct the independent organization certified under
 Section 39.151 for the ERCOT power region to enable aggregations
 broader than a single electric bus or node when technically
 feasible. In addition to any other applicable requirements,
 aggregated distributed energy resources must:
 (1)  demonstrate the ability to deploy energy,
 ancillary services, or both at the direction of the independent
 organization certified under Section 39.151 for the ERCOT power
 region; and
 (2)  comply with applicable distribution system
 reliability and market requirements.
 (d)  In allowing for the participation of a person who owns
 or operates a distributed energy resource or aggregation of
 distributed energy resources under this section, the commission
 shall adopt registration, qualification, interconnection,
 telemetry, data submission, compliance, cost allocation, and other
 appropriate requirements. The requirements:
 (1)  must ensure that:
 (A)  participation does not unduly affect the
 security or reliability of the transmission and distribution
 system; and
 (B)  the provision of ancillary services by a
 distributed energy resource or aggregation of distributed energy
 resources, to the extent technically necessary to the provision of
 ancillary services, can be measured and verified separately from
 any associated load;
 (2)  may differ from requirements for a generation
 resource that is not a distributed energy resource; and
 (3)  must provide for energy production and consumption
 at a single metering point to be accounted for and settled by the
 independent organization certified under Section 39.151 for the
 ERCOT power region to the distributed energy provider and the
 retail electric provider in a manner that prevents double counting.
 (e)  A retail electric provider may aggregate distributed
 energy resources or assist in the aggregation of distributed energy
 resources for a third party. The retail electric provider:
 (1)  is not:
 (A)  considered to be a power generation company
 solely for that reason;
 (B)  required to register as a power generation
 company; or
 (C)  exempt from Chapter 17, this chapter, or
 commission rules relating to the aggregation; and
 (2)  is responsible for ensuring the compliance of a
 subcontractor, an agent, or any other entity compensated by the
 retail electric provider for aggregation services.
 (f)  Participation in an aggregated distributed energy
 resource by a market participant or consumer is subject to the
 commission's consumer protection rules, jurisdiction, and
 authority under this title.
 SECTION 4.  (a) The Public Utility Commission of Texas shall
 adopt the rules required by Section 39.9166, Utilities Code, as
 added by this Act, as soon as practicable after the effective date
 of this Act to ensure that the requirements of Subsection (b) of
 this section are met.
 (b)  The Public Utility Commission of Texas shall allow the
 participation as required by Section 39.9166, Utilities Code, as
 added by this Act, not later than September 1, 2024.
 (c)  The Public Utility Commission of Texas:
 (1)  may operate a pilot program to allow the
 participation described by Section 39.9166, Utilities Code, as
 added by this Act, before September 1, 2024; and
 (2)  before September 1, 2024, is not required to
 modify a pilot program operated before the effective date of this
 Act to allow the participation of distributed energy resources in
 the ancillary services and wholesale energy markets in the ERCOT
 power region.
 SECTION 5.  This Act takes effect immediately if it receives
 a vote of two-thirds of all the members elected to each house, as
 provided by Section 39, Article III, Texas Constitution.  If this
 Act does not receive the vote necessary for immediate effect, this
 Act takes effect September 1, 2023.